The definition of ‘Small Companies’ has been amended by the Ministry of Corporate Affairs. The threshold for paid-up capital is now Rs 10 crore (up from Rs 4 crore) and for turnover is Rs 100 crore (up from Rs 40 crore), easing compliance.
The Ministry of Corporate Affairs, in a notification, highlighted the change in the definition of Small Companies under the Companies Act, 2013. The Central Government has issued the Companies (Specification of Definition Details) Amendment Rules, 2025, amending the Companies (Specification of Definition Details) Rules, 2014.
Revised Capital and Turnover Limits
Under the new arrangement, a company will be considered a Small Company if its Paid-up capital does not exceed Rs 10 crore, and its turnover does not exceed Rs 100 crore. Earlier, the threshold was not exceeding Rs 4 crore for paid-up capital and not exceeding Rs 40 crore for the turnover.
Implementation and Background
Issued through G.S.R. 880(E), the notification states that the amended rules will come into effect from the date of their publication in the Official Gazette. Under the new provisions, the Central Government has substituted clause (t) of Rule 2 of the 2014 Rules, significantly increasing the eligibility limits for small companies.
The principal Companies (Specification of Definition Details) Rules, 2014 were originally published on March 31, 2014, and last amended on September 15, 2022. The latest revision is expected to ease compliance requirements for a larger number of businesses by expanding the scope of companies eligible for small-company benefits. (ANI)
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